About this episode

This episode discusses the signs that indicate it's time for salon owners to transition from a sole trader to a limited company due to tax and liability concerns.

Are you running your salon as a sole trader but feel like your business is outgrowing the structure? Many salon owners reach a point where unlimited liability and higher tax rates start to pinch, making you wonder if there’s a better way.This episode outlines the three clear signs that it’s time to switch your salon to a limited company.━━━━━━━━━━━━━━━━━━━━💰 IS YOUR SALON PAYING TOO MUCH TAX?* **The Sole Trader Tax Trap:** As a sole trader, every pound of profit is taxed as your personal income. After your personal allowance (around £12,500), you pay 20% income tax plus 6% National Insurance, escalating to 40% income tax on profits above £50,270.* **Limited Company Tax Advantage:** A limited company pays corporation tax at 19% on profits up to £50k. You then take a small salary (tax-deductible for the company) and the rest as dividends, which are taxed at a lower rate with no National Insurance. This could save you around £100 per month on £60k profit.* **Phil's Rule of Thumb:** If your salon's profits are consistently £40,000 or more, you're almost certainly paying more tax than needed as a sole trader. It’s time to consult your accountant.🛡️ IS YOUR PERSONAL WEALTH AT RISK?*…

People in this episode

Host: Phil Jackson

Topics covered

• sole trader
• limited company
• tax advantages
• business structure
• liability

Keywords

• sole trader
• limited company
• tax
• liability
• business structure
• profits
• National Insurance

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